Question

Kwok Winn wants to open a new business in his own country, Singapore. He has decided on a form of licensing that will provide him with a standard package of products, systems, and management services in order to sell fast food to local residents. Which of the following best describes the form of business that Mr. Winn has chosen?

1) Direct sales
2) Indirect exporting
3) Joint venture
4) Strategic alliance
5) Franchising

Answer 1

Mr. Kwok Winn has chosen to enter into a business arrangement known as franchising, which is a standardized package that includes products, systems, and management services for selling fast food.

Step-by-step explanation:

The form of business that Mr. Kwok Winn has chosen for opening a new fast food enterprise in Singapore is best described by option (5) Franchising. A franchise is a business model where the franchisee (Mr. Winn, in this case) purchases the rights to operate and sell a product or service using the franchisor's brand and business system. In the franchising business model, the franchisee benefits from the franchisor's established standard package of products, tested systems, and management services. Furthermore, franchisors often provide necessary training and support in setting up operations. In return for these benefits, the franchisee typically pays an initial franchise fee and ongoing royalty fees to the franchisor.

Franchising is a common strategy for business expansion and allows for a consistent brand experience across different locations. It is a popular model in the food industry, particularly for fast food outlets, where maintaining standardized operations, quality, and branding are essential for success.